Presentation is loading. Please wait.

Presentation is loading. Please wait.

Chapter 22 Crash and Depression Photos by photographer Dorothea Lange.

Similar presentations

Presentation on theme: "Chapter 22 Crash and Depression Photos by photographer Dorothea Lange."— Presentation transcript:

1 Chapter 22 Crash and Depression Photos by photographer Dorothea Lange

2 Herbert Hoover Herbert Hoover elected President in 1928: We are nearer to the final triumph over poverty than ever before in the history of any land Economy, business and gov. all seemed strong, no limits were placed on borrowing

3 Causes of the Great Depression 1. Uneven Prosperity: –Huge corporations dominated industry: 200 companies owned 49% of industry –Majority of people (71%) earned less than $2500 a year, with no savings. Wealthy families (.1%) had over $100,000. 2. Credit: –Huge debt in America, over 60% borrowing

4 3. Too Many Goods/ Too Little Demand –Warehouses full, but no market –Farmers in trouble after WWI –Workers: most still overworked and under paid

5 4.Playing the Stock Market –Speculation: gambling on a long shot –Buying on Margin

6 Stock/Stock Market What is stock? Who is a stockholder? What does a stockbroker do? How does the value of stock increase? How does the value of stock decrease? Who buys your stock from you?

7 Why do people Buy Stock? If a company does well, stock holders benefit –Investing/Dividend Checks Can be a quick and easy way to make money –Gambling/ Buy Low, Sell High Why do Companies Sell Stock? To enable their company to expand Quick and easy way to get money to –Hire more people –Increase # of stores –Improve technology

8 Investing: Stockholders are committing to the company for the Long Haul Stockholders are committing to the company for the Long Haul Dividend checks each quarter if company makes profit –McDonalds makes $10,000 in profits one quarter, you own 1% of the stock in that company, you make _______________. Reinvest or keep? Companies can count on your money Gambling/ Playing the Stock Market: No Commitment to the Company Buy Low, Sell High –Health South stock crashes! –Still a good company Could buy for 3 cents! Buy 10, 000 shares, you pay _________ Sell your stock at $6.00 a share, you make _____________! –Companies cannot count on your money

9 What is Buying on Margin? What is a loan shark? How can a loan shark affect the Stock Market?

10 Major Issues today: Home Mortgage What is a Mortgage? Buying a Home: What is a Fixed Interest Rate? What is an ARM (Adjustable Rate Mortgage)? –30 year Mortgage: 8.0% –7 Year ARM: 5.0 % –5 Year ARM: 4.5% –3 Year ARM: 4.0% What are the advantages to A Fixed Rate? What are the disadvantages to A Fixed Rate? What are the advantages to an ARM? What are the disadvantages to an ARM?

11 TIMELINE September 1929: Professional investors felt the market was in danger –No new customers were investing –Many began to sell off their stocks October 24, 1929:Major Selling –A group of bankers pooled money and tried to slow the rush by investing –Stabilized a bit, but on Monday, falling again October 29, 1929: BLACK TUESDAY –STOCK MARKET CRASHED

12 Black Tuesday!! –The Stock Market Crash triggered the Great Depression was not the cause! –16.4 million shares sold Over 30 billion in value lost Initially only affected those who had invested in the market

13 By mid-November, investors had lost about $30 billion


15 Workers are affected As income and profits fell, factories began to close Workers lost jobs-most had no savings and now no income, more factories closed, more Americans out of work…began a downward cycle

16 Auto Sales Decline= Less demand for: Textiles, Oil, Steel, Rubber Industry slowed which caused Lower Wages and Unemploy ment Which helped contribute further to

17 BANKS People began to try to withdraw savings from banks, but found that their savings accounts had been vanished Bank run 1929, Los Angeles

18 Banks Banks had lent money to speculators Banks had invested depositors money in the stock market hoping for higher profits People rushed to get money, many banks closed Over 5,500 banks closed Over 9 million savings accounts vanished

19 MISTAKES BY GOV. Hawley-Smoot Tariff: intended to protect American Industry –Raised Tariffs by as much as 70% –Shut down international trade Federal Reserve: had cut interest rates in 1920s to encourage spending –This encouraged Risky Spending

20 DEPRESSION AFFECTS THE WORLD US investments withdrawn from postwar Europe –Unemployment rose –Governments in danger of revolution

21 Social Effects of the Depression Hardest hit were those at the bottom of the economic ladder –Last to be hired and 1 st to be fired Hoovervilles and Hoover Blankets –Nicknames to mock the president

22 HOBOS: Homeless, unemployed Americans searching for work Riding the rails Mainly boys and young men


24 THE DUST BOWL Because of over cultivation of fields, Midwestern lands had no trees to protect land 1932 drought, land dried up and had nothing to help hold the topsoil Winds created dust storms


26 Over 1,000,000 people left Midwest and moved to California

27 Cities and Rural Areas CITIES: people begged, went to soup kitchens, worked at any job they could find RURAL AREAS: People grew food if possible, foraged in woods, tried to live off the land

28 Stress on Families Families had to live together in small apartments, 2-3 families per home Divorce rates: –dropped b/c could not afford lawyers Men felt like failures b/c they could not support family Women often forced from jobs: more imp. For men to work

29 Children in the Great Depression Schools closed –Children lost education Families couldnt support their children –Sent to orphanages

30 Discrimination in the Depression Whites began to take minorities jobs Many relief programs would not help minorities Some whites declared that blacks should not have jobs if whites were out of work Blacks were denied civil rights, education, voting, health care…

31 Lynching increased Hispanics and Asians were deported

32 March 31, 1931: Scotsboro, AL Scotsboro Boys: 9 black men accused of assaulting 2 white men and raping two white women

33 No evidence All 9 convicted and sentenced to death (youngest was 13) Appeals lasted until 1950 1976 Governor Wallace pardoned the boys

34 Pulling together Majority of Americans pulled together to help out –Food Handouts –Work for room and board –Auctioneers left with no profits as neighbors kept bids low

35 Escaping the Depression: Hollywood 60-90 million Americans went to the movies to see beauty and glamour: to forget their troubles

36 Escaping The Depression: Radio Radio comedy sketches and soap operas also provided escapes:

37 President Hoover Responds Told people to have faith, that conditions would improve soon Met with heads of banks, railroads, and other big business leaders –Convinced them to maintain wages and keep workers at jobs –By 1931, businesses could not do this; began to cut pay

38 Hoover insisted that voluntary action was best Felt that direct federal relief would destroy peoples self respect

39 Did begin public works programs: public buildings, roads, parks, dams to create jobs –too little to impact the depression

40 Only way to create enough jobs to make an impact was massive gov. spending –Hoover refused to do this Had to have money for this to work –Where to get the money? Raise taxes Government deficit

41 Reconstruction Finance Corporation 1932: Hoover wanted banks to loan money to corporations to expand job hiring Extend loans and credit to banks, railroads, and other large corp. Ordinary people believed gov. was helping rich

42 Emergency Relief and Construction Act Hoover finally allowed massive Govt spending –1.5 million was given for public works –300 million to states Not big enough a program to help –Economic collapse continued

43 Americans Respond to the Depression Hunger Marches –Against large corporations –Against the govt Feed the Hungry, Tax the Rich

44 Farmers Revolt –Began destroying crops to try to raise prices and blocked roads to prevent deliveries

45 Bonus Army : Summer 1932 –15,000 WWI Vets March on DC –Were promised bonuses after WWI To be paid in 1945 –House: Yes –Senate : No Most went home –Many stayed in abandoned buildings –Army was called in to remove them –ARMY VS. BONUS ARMY Nation Horrified Hoover accepts responsibility Hurts him in 1932 election

46 Election of 1932 Hoover –Federal Govt should not step in and try to fix peoples problems FDR –Large scale problems require the help of the govt FDR won by over 7,000,000 votes –Many voted AGAINST Hoover

47 The only thing we have to Fear, is Fear Itself

48 Chapter 23: The New Deal FDRs program of (attempted)economic recovery Willing to try anything to restore hope of Americans

49 Sought advice from experts in business, agriculture, government, law, social work… –Deliberately chose people who had different viewpoints than him

50 The First New Deal The First One Hundred Days: –FDR sent one bill after another to Congress Btwn March 9 and June 16, Congress passed 15 major acts for the New Deal

51 Banks and the Stock Market: FDR sworn in on March 3, 1933 March 5 declares Bank Holiday – –Temporarily closes all banks to inspect their health

52 Emergency Banking Relief Act- –inspect banks; those that were ok would be issued a Treasury Department License –2/3 of banks re-opened March 15

53 Fireside Chats A series of 30 radio addresses given between 1933 and 1944 –To give people confidence in the govt

54 FDIC- Federal Deposit Insurance Corporation government insurance on bank deposits up to $5000.

55 S.E.C. Securities and Exchange Commission: –govt agency to regulate the stock market and prevent fraud Companies had to provide truthful and accurate information to investors

56 Alphabet soup Agencies: For Relief, Recovery and Reform

57 A. A. A. Agricultural Adjustment Act- May 1933 To raise prices by lowering output; govt would pay farmers not to grow certain crops –Problem: by May, most farmers had already planted and began raising livestock Farmers had to plow under @25% of their crops and slaughter @ 6 million piglets –Was successful at raising many farm incomes, but raised prices when many consumers could not afford to pay extra

58 C. C. C. Civilian Conservation Corps: Most highly praised agency, and Roosevelts favorite 18-25 year old men working to protect and preserve nature –Planting trees, fighting fires, building dams, parks, campgrounds, trails

59 Made around $30 a month, and lived in camps near where they worked.

60 T.V.A. Tennessee Valley Authority: Dam building project to control floods, conserve forestland, and bring electricity to one of the most depressed areas in America

61 Constructed 20 dams and employed as many as 40,000 people –Problem: many people were forced to leave homes for new govt lands –Pollution

62 H.O.L.C Home Owners Loan Corporation Bought many mortgages of those who could not make payments –Restructured and refinanced to make payments more affordable Problems: only offered to those still employed, and would foreclose just as a bank would if payments not met

63 F.C.A. Farm Credit Administration: Helped farmers refinance mortgages

64 P.W.A. and C.W.A. Public Works Administration and Civil Works Administration Both designed to put average Americans to work building and improving highways, dams, sewers, waterworks and schools

65 –P–P–P–PWA- awarded contracts to companies –C–C–C–CWA- directly hired individuals Built 1,000 airports, 500,000 miles of roads, and 40,000 school buildings Employed over 4 million people –P–P–P–Problems: FDR worried about the ONE billion dollar cost and cut the program in 1934.

66 Legacy of 1 st New Deal: restored hope and gave Americans confidence in the govt.

67 The Second New Deal: 1935: FDR launched a series of new programs to speed up the economic recovery of the nation 1 st New Deal had provided jobs, but had not stimulated the economy as much as FDR hoped.

68 W.P.A. Works Progress Administration: Americans built highways, roads, streets, public buildings, parks, bridges, and airports Controversial Part: Federal Theatre Project financed artists and playwrights

69 N.L.R.B. National Labor Relations Board/ Wagner Act: Gave unions the right to organize w/o interference from companies Problem: gave unions too much power –Supreme Court struck it down

70 S.S.A. Social Security Act: 1935: –viewed as an insurance bill, paid jointly by employee and employer Monthly retirement benefit (age 65) Unemployment insurance Disability Insurance Welfare Problem: took money out of paychecks to finance this

71 F.L.S.A Fair Labor Standards Act:1938: more protection for workers Established minimum wage (.25/hr) 40 hour work week Banned child labor Problems: –Companies cut pay, cut hours and cut child labor

72 Challenges/Limits of the New Deal Programs: New Deal agencies did not extend to minorities and women: –Women paid less for the same work –Most jobs went to the head of the family –African Americans segregated further Not offered skilled, professional jobs Lower pay than whites

73 Roosevelt did not support anti-lynching bills –Feared losing southern support –Did appoint more African Americans to govt positions than any other president

74 The New Deal Does Too Much: Republicans opposed FDRs programs –Overtaxes the rich –Is Socialistic –Social Security penalizes successful people –Puts limits on individual freedoms American Liberty League: 1934: to organize opposition to the New Deal

75 The New Deal Does Not Do Enough: Progressives and Socialists wanted more –Should create a new economic system –Govt should take over factories and farms –Govt should redistribute wealth

76 Court Packing Gets Criticism: Supreme Court and FDR had butted heads over many work programs: courts had ruled many unconstitutional 1937: FDR proposed a major court reform bill –No specific # had been set for judges;9 had been tradition

77 –FDR wanted to add 6 more judges; said it was to lighten the burden on the other 9; really wanted judges who would support him –Seemed to many that FDR was acting like a dictator; compromising the 3 branches –Senate quietly killed the bill

78 Union Activity Increases: 1.Wagner Act- gave unions federal protection 2. AFL and CIO increase in membership 3. Sit-down strikes: subs could not be brought in, companies were forced to deal with unionists. Many sit-downs turned violent –Sit-down strikes were outlawed in 1939

79 Recession of 1937: Social Security Tax came directly out of paychecks FDR cut back on many job programs because of rising national debt

80 Legacy of the New Deal: New Deal did not end suffering, but it changed America forever. –Voters began to expect Presidents to solve their problems –Accept more govt intervention in their lives –Laborers demand more changes in the workplace Many new deal programs still around today: – TVA, FDIC, Securities and Exchange Commission, Social Security

81 New Deals Greatest Achievement: –brought hope to America New Deals Greatest Failure: –was to be a temporary solution to the Depression

Download ppt "Chapter 22 Crash and Depression Photos by photographer Dorothea Lange."

Similar presentations

Ads by Google